What’s the human side of a down real estate market?

Last August 2006, I was holding an open house when in walked two vivacious women; best friends, one from Texas and one from Massachusetts. They had just moved their families to Mooresville/Lake Norman which they decided was the ultimate place for their families because of the quality of life, the great schools, the reasonable real estate market, the great golf and,of course, the lake. We clicked immediately; talking about their moves, the area and what they were each looking for in a home. Their families were both renting month-to-month until they found their perfect homes. The friend from Texas had just sold her home but for less then they had hoped. The friend from Massachusetts had not sold her home but was optimistic that it would sell quickly because it was a lovely home in a great neighborhood.

Last month, May 2007, the family from Texas, now special friends, moved in to a wonderful home overlooking the lake. . I am so thrilled that we found the right home for them after making a few unsuccessful offers on properties that just weren’t quite right. I think we all knew it the moment we walked in the door that we had finally found it. And you know what? The house and property is EXACTLY what they described the first day we met!

Yesterday, the friend from Massachusetts signed a two-year lease on a lovely home. It has been a very tough road for them and I can’t tell you how much I admire their gracious acceptance of their circumstances. After we first met we looked at homes for sale but as the months wore on we stopped looking for purchases and began talking about leases. Their home in Massachusetts had been reduced several times but throughout the winter got almost no showings. In the meantime, they were paying a mortgage plus their rent here and watching their equity shrink. Their house now finally under contract, they feel they will be lucky and even happy to break even at closing. Their equity is gone as well as much of their savings yet they are so relieved to finally have only one house payment a month. They hope to be able to buy again in several years.

I have experienced a down market before in California in the early 1990’s when many clients were what we called “upside-down”…their home was worth less than they paid for it. We did short sales and watched our clients lose hundreds of thousands of dollars when they sold. It was very tough then and it hasn’t gotten any easier 16 years later.

Clearly, the slow housing markets throughout the country are now impacting our greater Charlotte/ Lake Norman area real estate market which had been growing despite the slowdown for quite a while. Many of our buyers are relocating here from states where they have taken a loss. Not only are these buyers now able to pay less but, having been burned, they are much more hesitant to make anything close to a full-price offer. The impact on our current market is not just financial, it is clearly psychological as well, and not just on the buyers side. The biggest challenge we have with listings is trying to convince our sellers to price their properties realistically and to not be offended with low offers. It will be very interesting to watch our market evolve and I will continue to share my experiences.